02417cam a22002537 4500001000600000003000500006005001700011008004100028100002300069245013800092260006600230490004100296500001800337520140300355530006101758538007201819538003601891700002401927700002101951710004201972830007602014856003702090856003602127w2404NBER20180524140902.0180524s1987 mau||||fs|||| 000 0 eng d1 aHulten, Charles R.10aEnergy, Obsolescence, and the Productivity Slowdownh[electronic resource] /cCharles R. Hulten, James W. Robertson, Frank C. Wykoff. aCambridge, Mass.bNational Bureau of Economic Researchc1987.1 aNBER working paper seriesvno. w2404 aOctober 1987.3 aThe growth rate of output per worker in the U.S. declined sharply during the 1970's. A leading explanation of this phenomenon holds that the dramatic rise in energy prices during the 1970's caused a significant portion of the U.S. capital stock to become obsolete. This led to a decline in effective capital input which, in turn, caused a reduction in the reduction in the growth rate of output per worker. This paper examines a key prediction of this hypothesis. If there is a significant link between energy and capital obsolescence, it should be revealed in the market price of used capital: if rising energy costs did in fact render older, energy-inefficient capital obsolete, prospective buyers should have reduced the price that they were willing to pay for that capital. An examination of the market for used capital before and after the energy price shocks should thus reveal the presence and magnitude of the obsolescence effect. We have carried out this examination for four types of used machine tools and five types of construction equipment. We did not find a general reduction in the price of used equipment after the energy price shocks. Indeed, the price of used construction equipment - the more energy intensive of our two types of capital - tended to increase after 1973. We thus conclude that our data do not support the obsolescence explanation of the productivity of slowdown. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web.1 aRobertson, James W.1 aWykoff, Frank C.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w2404.4 uhttp://www.nber.org/papers/w240441uhttp://dx.doi.org/10.3386/w2404